One of the nation’s top truckload carriers has filed for Chapter 11 reorganization. A week ago Burlington Motor Carriers, Daleville, Indiana filed the petition with the U.S. Bankruptcy Court for the Southern Indiana district.
While Burlington officials would not agree to an interview, their attorney did issue a written statement Friday saying the Chapter 11 filing was “a result of its inability to restructure its long term debt with equipment lenders.”
In the statement, CEO Tom Grojean said “the company has in place a new $50 million post-petition credit line with its primary lender, Foothill Capital Corporation. That line is more than adequate to support continued profitable operations while the company reorganizes in the bankruptcy proceeding.”
Attorney Steve Ancel told Truckinginfo.com they hope to have the reorganization complete by the first of next year
The news comes as the company has recently expanded and garnered some legal trouble.
In March, Burlington Motor Carriers purchased Trans-States Lines of Fort Smith, Arkansas. They acquired about 250 tractors and 475 trailers. At the time of the Trans-States purchase, Traffic World magazine reported the deal would make Burlington one of the nation’s 15 largest truckload carriers. The statement released on Friday says Burlington and its wholly owned subsidiary Joliff Transportation operates 2,000 trucks. Burlington officials also noted at the time that they planned to grow “aggressively” this year, having increased their fleet size 19%.
Soon after, the Owner Operator Independent Drivers Association and two of its members filed a class action suit against Burlington Motor Carriers for allegedly violating federal truth-in-leasing regulations.
In the complaint filed in U.S. District Court for the Southern District of Indiana, OOIDA states that despite Burlington’s agreement to charge back premiums for insurance coverage purchased through the company, it was deducting amounts from owner operator settlements in excess of the actual premiums.
OOIDA is represented in the suit by The Cullen Law Firm, Washington, D.C. When contacted Friday about the Chapter 11 filing, attorney Paul Cullen, Jr. said they had just received the court records and were not able to comment any further at the time.
While Burlington officials would not agree to an interview, their attorney did issue a written statement Friday saying the Chapter 11 filing was “a result of its inability to restructure its long term debt with equipment lenders.”
In the statement, CEO Tom Grojean said “the company has in place a new $50 million post-petition credit line with its primary lender, Foothill Capital Corporation. That line is more than adequate to support continued profitable operations while the company reorganizes in the bankruptcy proceeding.”
Attorney Steve Ancel told Truckinginfo.com they hope to have the reorganization complete by the first of next year
The news comes as the company has recently expanded and garnered some legal trouble.
In March, Burlington Motor Carriers purchased Trans-States Lines of Fort Smith, Arkansas. They acquired about 250 tractors and 475 trailers. At the time of the Trans-States purchase, Traffic World magazine reported the deal would make Burlington one of the nation’s 15 largest truckload carriers. The statement released on Friday says Burlington and its wholly owned subsidiary Joliff Transportation operates 2,000 trucks. Burlington officials also noted at the time that they planned to grow “aggressively” this year, having increased their fleet size 19%.
Soon after, the Owner Operator Independent Drivers Association and two of its members filed a class action suit against Burlington Motor Carriers for allegedly violating federal truth-in-leasing regulations.
In the complaint filed in U.S. District Court for the Southern District of Indiana, OOIDA states that despite Burlington’s agreement to charge back premiums for insurance coverage purchased through the company, it was deducting amounts from owner operator settlements in excess of the actual premiums.
OOIDA is represented in the suit by The Cullen Law Firm, Washington, D.C. When contacted Friday about the Chapter 11 filing, attorney Paul Cullen, Jr. said they had just received the court records and were not able to comment any further at the time.
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